Equitable Co-Operative Foundry Co. v. Hersee

40 N.Y. Sup. Ct. 169
CourtNew York Supreme Court
DecidedMay 15, 1884
StatusPublished

This text of 40 N.Y. Sup. Ct. 169 (Equitable Co-Operative Foundry Co. v. Hersee) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Equitable Co-Operative Foundry Co. v. Hersee, 40 N.Y. Sup. Ct. 169 (N.Y. Super. Ct. 1884).

Opinions

Smith, P. J. :

Trover for certain stoves and stove furniture claimed to be the property of the plaintiff, and to have been converted by the defendant to his own use. The property in question was sold and delivered by the plaintiff in the summer and fall of 1876, to the firrft of M. Fisher & Co., on credit. The firm was composed of Martin Fisher and Sanford Whiting, and was engaged in the business of selling stoves and hollow-ware, in the city of Buffalo, where the defendant resided. At the time of the purchase, the firm was insolvent, and was indebted in a large amount, nearly $10,000 of which was owing [171]*171to the defendant. The plaintiff claims that it was induced to sell said goods to said firm, on -credit, by false and fraudulent representations made by Fisher as to the means and pecuniary condition of the firm, and that said firm, knowing their insolvency, purchased the said goods with intent not to pay for them. On 12th August, 1876, the defendant herein commenced an action against the members of said firm, in which he claimed judgment against them for the sum of $9,471.34, besides interest, upon twenty-six promissory notes, executed by said firm to him at different dates from the 1st of May, 1872, to 29th July, 1876. The defendants in that action made default, ancl Hersee did not enter up judgment against them until 23d Octooer, 1876. Most of the goods which form the subject of this action were delivered to Fisher & Co., and received by them after Hersee sued them and before he entered up judgment. Soon after the said judgment was docketed, Hersee, by virtue of an execution issued on the same, levied upon a portion of said property of the value of $711.58, and bid it off .at sheriff’s sale, applying the amount of his bid towards the satisfaction of his said judgment. The plaintiff was informed of Hersee’s judgment in October, soon after it was obtained. On 25th ^November, 1876, the plaintiff signed an agreement to compromise its debt against Fisher & Co., at twenty-five cents on the dollar, conditioned, however, that it was not to be binding till all the creditors assented to the same. At the time of signing said compromise, the plaintiff had an oral stipulation with Fisher & Co., for a preference. The conditions of the compromise were not fulfilled and the plaintiff received nothing under it. On 28th March, 1877, the plaintiff commenced suit against Fisher and Whiting on the contract for the purchase of the goods. Fisher and Whiting appeared in the action by attorney, but did not answer, and made default. On the eighteenth April, the plaintiff’s attorney served notice of adjustment of costs, but no adjustment was had, and no judgment was docketed, and the suit remained in that condition until after this action was commenced. The defendant herein set up that action as a defense, claiming that the plaintiff had elected thereby to affirm the contract, and thereupon the plaintiff, on 26th September, 1879, obtained and entered an ex parte order at a Special Term of this court, that the said action be discontinued on payment of defendants’ costs. On [172]*172the same day the plaintiff tendered to the attorney of Fisher and Whiting, ten dollars for their costs in said action, which he declined to accept. On 14th May, 1877, the plaintiff commenced suit against Hersee, in which Fisher and Whiting were named as defendants, but the summons and complaint were served on Hersee alone, and he alone answered. .The allegations in the complaint upon which issue was taken and a trial had, "were, in substance, that the purchase of said goods was fraudulent and that Hersee participated in the fraud. The action was tried before Mr. Justice Barker without a jury, and judgment was rendered in favor of Hersee, which was affirmed in this court on appeal in June, 1879. The action now before us was commenced 31st of July, 1879. The referee before whom it was tried found, in substance, that the sale of said goods on credit was induced by representations made by Fisher respecting the means and liabilities of said firm, which were false to his knowledge ; that at that time Fisher & Co. were insolvent and unable to pay their debts, and knew themselves to be so, and that they ordered said property and obtained possession of the same without the expectation or intention of paying for it. He found the facts of the indebtedness of said firm to Hersee, the suit brought and judgment recovered thereon, and the issuing of execution and the levy and purchase by Hersee, substantially as above stated. He also found that at the time of the purchase Hersee advanced nothing for the goods, but took them in part payment of a precedent debt and was not a bona fide purchaser. He found that before the commencement of said action the plaintiff demanded of the defendant possession of said goods and defendant refused to surrender them. He also found the facts above stated in reference to the compromise and the two actions brought by the plaintiff; and he found that in the last of said actions Justice Barker decided that the purchase by Fisher & Co. yras fraudulent, but that Hersee was not a party to the fraud. The referee also found as conclusions of law that by reason of the fraud so found no title to the property vested in Fisher & Co.; that as the defendant parted with no value for the goods, he acquired no better right to them than was possessed by Fisher & Co.; that defendant’s, levy was a conversion; that none of the subsequent acts of the plaintiff constituted a waiver of the cause of action herein, and that the. plaintiff is entitled to [173]*173recover of the defendant the value of so much of said property as was levied on by him with interest. •

The contention of the appellant’s counsel that the finding of fraud on the part of Fisher & Co. is not supported by the evidence cannot be maintained. The testimony on the part of the plaintiff tending to prove the alleged false representations, although controverted, fully supports the findings upon that point. Independently of the false representations, the undisputed fact that Fisher & Co., knowing themselves to be largely insolvent, continued to receive the plaintiff’s goods after Hersee had sued them, without disclosing the fact of such suit, is very strong evidence that they did not intend to pay foi the goods when they ordered and received them. There was, therefore, ample proof of fraud aside from the findings of Justice Barker in the suit tried before him ; and the questions raised by the appellant’s counsel as to those findings, and whether they were admissible in evidence, are immaterial. It may be remarked, however, that the question of their admissibility is put at rest by the stipulation appearing in the case, whieh provides that either party may read from the judgment-roll in the case of the present plaintiff against Hersee, impleaded with Fisher and Whiting, which was the case tried before Justice Barker. The findings were incorporated in the judgment-roll, and properly so. (Code, § 1237.) •

A more difficult question is whether the evidence shows that the plaintiff, with knowledge of the fraud, elected to affirm the contract of sale. That he was informed of Hersee’s judgment a few days after it was docketed, and had full knowledge of the fraud as early as the following January, is clearly proved. The agreement to compromise was in November, 1876. Had the agreement been consummated, or had the plaintiff received anything under it, there would be no difficulty in holding that the plaintiff thereby waived its right to avoid the contract. But the agreement resulted in nothing. It bound no one.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Goss v. . Mather
46 N.Y. 689 (New York Court of Appeals, 1871)
Nichols v. . Michael
23 N.Y. 264 (New York Court of Appeals, 1861)
Gillet v. . Roberts
57 N.Y. 28 (New York Court of Appeals, 1874)
Kinney v. . Kiernan
49 N.Y. 164 (New York Court of Appeals, 1872)
Morris v. . Rexford
18 N.Y. 552 (New York Court of Appeals, 1859)
Bank of Beloit v. . Beale
34 N.Y. 473 (New York Court of Appeals, 1866)
Averill v. . Patterson
10 N.Y. 500 (New York Court of Appeals, 1853)
Moller v. . Tuska
87 N.Y. 166 (New York Court of Appeals, 1881)
White v. Dodds
18 Abb. Pr. 250 (New York Supreme Court, 1863)
Matteawan Co. v. Bentley
13 Barb. 641 (New York Supreme Court, 1852)
Wheaton v. Baker
14 Barb. 594 (New York Supreme Court, 1853)
Stevens v. Hyde
32 Barb. 171 (New York Supreme Court, 1860)
Nichols v. Smith
42 Barb. 381 (New York Supreme Court, 1864)
Mowrey v. Walsh
8 Cow. 238 (New York Supreme Court, 1828)
Rawson v. Turner
4 Johns. 469 (New York Supreme Court, 1809)
Storm v. Livingston
6 Johns. 44 (New York Supreme Court, 1810)
Goss v. Mather
2 Lans. 283 (New York Supreme Court, 1870)
Marshall v. Davis
1 Wend. 109 (New York Supreme Court, 1828)
Littlefield v. Brown
1 Wend. 398 (New York Supreme Court, 1828)
Saltus & Saltus v. Everett
20 Wend. 267 (New York Supreme Court, 1838)

Cite This Page — Counsel Stack

Bluebook (online)
40 N.Y. Sup. Ct. 169, Counsel Stack Legal Research, https://law.counselstack.com/opinion/equitable-co-operative-foundry-co-v-hersee-nysupct-1884.